Delivered Duty Paid (DDP)
The seller does it all — pays main freight, import clearance and duty, and delivers to the buyer's named destination; the maximum-obligation rule for the seller.
Delivered Duty Paid (DDP) means the seller brings the goods to the named destination in the import country, completes both export and import clearance, pays import duty and import taxes such as VAT, and delivers with the goods ready for unloading on the arriving vehicle (unloading excluded unless agreed). DDP places the maximum obligation on the seller and the minimum on the buyer under Incoterms 2020, with the seller bearing virtually all costs and risks to the destination.
DDP works for any mode and is common in cross-border e-commerce parcels, samples and "delivered-to-hand" finished-goods deals. Practical notes for Chinese exporters: the biggest pitfall is import clearance and taxes — the seller is usually not a local taxpayer in the import country and cannot easily declare or recover import VAT, so it must engage a local clearance agent while bearing the tax and compliance risk; changes in destination duty/VAT rates, customs valuation and inspections can all erode margin. Before quoting DDP, fully cost out destination duty, VAT, clearance fees, destination charges and possible inspection/demurrage costs, and confirm legal clearance is feasible — otherwise an under-calculated quote can turn into a loss on arrival.
FAQ
- Under DDP, does the seller really pay all import duty and VAT?
- Yes. Under DDP the seller handles import clearance and pays import duty plus import taxes such as VAT — the fundamental difference from DAP/DPU, where import clearance and duty fall on the buyer. Before quoting, build all destination import taxes into your cost and confirm you have a legal route to clear customs.
- As a Chinese seller doing DDP, can I recover the import VAT?
- Usually not. The seller is generally not a local taxpayer in the import country, so the import VAT paid often cannot be recovered and becomes a pure cost. In practice you engage a local clearance/tax agent in the destination country and must build this non-recoverable tax into the quote, or it will eat into your margin.
- Under DDP, who pays for unloading?
- Unless otherwise agreed, DDP delivery is likewise "ready for unloading on the arriving vehicle," so the buyer unloads. If you want the seller to unload, agree it separately in the contract.
Related terms
Sources: https://iccwbo.org/business-solutions/incoterms-rules/incoterms-2020/